3.4 Million Californians May Lose Medi-Cal Insurance Under Senate Budget Bill
TL/DR –
A current budget bill that is being discussed by the U.S. Senate could result in up to 3.4 million Californians losing their state Medi-Cal health insurance, according to California Governor Gavin Newsom. This is due to proposed cuts to healthcare and potential work requirements for Medicaid recipients, which could also contribute to the closure of rural hospitals, increased premiums, and reduced food aid. Newsom estimates that of the 5.1 million people in California that would need to prove their work status, one third would meet the requirements, while the remaining two thirds may lose their benefits due to difficulties in the verification process.
Proposed US Senate Budget Bill Threatens Californian Health Insurance
As many as 3.4 million Californians risk losing their state Medi-Cal health insurance due to a budget bill advancing in the U.S. Senate, according to Gov. Gavin Newsom. The proposed healthcare cuts in the “one big, beautiful bill,” could lead to rural hospital closures, minimize government food aid and increase premiums for people using Covered California, the state’s Affordable Care Act health insurance marketplace.
Medicaid, which provides health insurance to about 1 in 5 Americans based on income, is a lifeline for over a third of Californians, particularly in rural areas and among children. The current version of the bill would require many Medicaid recipients to prove every six months that they work, volunteer or attend school at least 80 hours per month, risking federal Medicaid funding for states that fail to implement these verification systems by the end of 2026.
According to the nonpartisan Congressional Budget Office, these requirements could lead to a $344 billion decrease in Medicaid spending over a decade and leave 4.8 million more people uninsured. Health policy experts warn that work requirements could result in eligible people losing their benefits if they are unable to provide proof.
Newsom claims that millions of people in California could lose coverage due to the new Medicaid work requirements. The state’s estimate is based on the number of people who lost Medicaid in New Hampshire and Arkansas after implementing their work requirements.
In 2021, California expanded healthcare to low-income undocumented immigrants, a move costing billions and facing criticism from Republicans. Newsom’s May budget proposal suggested significant cuts to this program, including freezing new enrollment in 2026 and requiring adults to pay $100 monthly premiums.
The GOP bill could also endanger 16 struggling hospitals in 14 rural counties, which previously received a $300-million lifeline in interest-free loans. Some senators are pushing to change a requirement that would reduce the tax imposed on Medicaid providers, which is a vital funding source for rural hospitals.
Collectively, these cuts could negatively impact California’s progress in reducing the number of residents without health insurance, currently standing at about 6.4%.
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